March Altus Capital Management is a Connecticut-based long/short equity hedge fund that primarily invests in healthcare stocks. The fund was started in 2012 by Neil Shah, a former healthcare manager at Shumway Capital Partners. According to March Altus Capital Management’s latest 13F filing, its U.S public equity portfolio was worth only $16 million at the end of September and 94% of it comprised stocks from the healthcare space. The fund runs a fairly concentrated portfolio, with only 11 long positions at the end of third quarter, four of which were new additions.
In this article, we’ll take a look at the top-5 stock picks of March Altus Capital Management, which accounted for over 70% of the value of the fund’s portfolio at the end of September.
– Related Reading: 10 Countries That Spend the Most on Healthcare
At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
#5. DexCom, Inc. (NASDAQ:DXCM)
– Shares Owned by March Altus Capital Management (as of September 30): 14,200
– Value of the Holding (as of September 30): $1.24 Million
DexCom, Inc. (NASDAQ:DXCM) has been a part of March Altus’ equity portfolio since the fourth quarter of 2013. During the third quarter, the fund increased its stake in the company by 22%. The medical device company has lost a chunk of its market cap in the current quarter amid market-wide selling of diabetes-focused firms. Due to this recent decline, DexCom, Inc. (NASDAQ:DXCM)’s stock is currently trading down by 12.23% year-to-date. On Monday, analysts at Canaccord Genuity reiterated their ‘Buy’ rating on the stock and set a price target of $70 on it, which is slightly lower than the current trading price of its shares.
#4. Johnson & Johnson (NYSE:JNJ)
– Shares Owned by March Altus Capital Management (as of September 30): 13,000
– Value of the Holding (as of September 30): $1.54 Million
March Altus Capital Management initiated its stake in Johnson & Johnson (NYSE:JNJ) during the second quarter and made no changes to it during the third quarter. Shares of the healthcare behemoth made their lifetime high at $126.07 earlier this year and are currently trading up by 13% year-to-date. Despite this rally, the stock still sports a decent forward yield of 2.76%. On November 12, the company issued a statement in which it revealed that its experimental sirukumab treatment for rheumatoid arthritis showed mixed results against AbbVie (NYSE:ABBV)’s top-selling drug Humira in a large trial. A number of analysts who track Johnson & Johnson (NYSE:JNJ) feel that it has limited upside, as it is trading above its estimated fair value of $112 per share.
We’ll check out three more of the fund’s top healthcare stock picks on the next page.